Tax Tables, Other Inflation Adjustments, Issued for 2013

Published January 11, 2013

On Jan. 11, the IRS issued Rev. Proc. 2013-15, which contains inflation-adjusted items for 2013, as well as the new income tax rate tables now in effect as a result of the American Taxpayer Relief Act of 2012, P.L. 112-240 (the Act). In October 2012, when the IRS issued its usual end-of-the-year inflation adjustment revenue procedure (Rev. Proc. 2012-41), it noted that many of the items normally included would have to wait until Congress acted. This release contains many of those items.

Among the inflation-adjusted amounts that have increased are the personal exemption, which increased from $3,800 in 2012 to $3,900 for 2013, and the standard deduction, which for married filing jointly status increased from $11,900 in 2012 to $12,200 in 2013. In addition, the adoption credit under Sec. 23 is inflation-adjusted from $12,650 in 2012 to $12,970 in 2013.

The revenue procedure also contains the inflation-adjusted unified credit against the estate tax, which is $5.25 million for 2013.

The AMT exemption amount for 2013 is $80,800 for married taxpayers filing joint returns and $51,900 for single taxpayers. The American Taxpayer Relief Act set the 2012 exemption amounts at $78,750 for married taxpayers filing jointly and $50,600 for single filers and indexed the numbers for inflation, so Congress will no longer have to pass annual AMT “patches.”

The revenue procedure provides the beginning income levels for the limitation on certain itemized deductions and the beginning income levels for the phaseout of personal exemptions, which were reinstated by the Act. It also includes the 2013 amounts for the child tax credit; the Hope scholarship, American opportunity, and lifetime learning credits; the earned income credit; and the phaseout limits for interest paid on qualified education loans. One curious item in the revenue procedure is the inclusion of the amount for the qualified transportation fringe benefit for 2012. The Act retroactively reinstated parity between the benefits for parking and for transportation in a commuter highway vehicle or a transit pass for 2012 at $240 a month, which the IRS notes in the revenue procedure. However, as a practical matter, taxpayers have received their benefits for 2012, and it is unclear what the mechanism would be to refund the tax paid on amounts that would have been excluded from income under the higher $240 a month level.